Glencore monitoring coronavirus impact as it swings to a loss

18 February 2020, 09:54

Smokes plumes from chimney
Glencore swings to a loss. Picture: PA

The trade war between the US and China impacted Glencore, the business said.

The boss of mining giant Glencore said he has one eye firmly on the coronavirus outbreak while looking back on a year hampered by trade wars and low prices for its key commodities.

The business said the outbreak has already pushed down prices of some commodities as it swung to a loss for the first time in years.

“Looking ahead, in the short-term, we are closely watching coronavirus developments and potential scenario impacts on global growth and markets,” said Ivan Glasenberg, the company’s chief executive.

The business saw its net income of 3.4 billion US dollars (£2.6 billion) in 2018 swing to a net loss of 404 million US dollars (£311 million).

Adjusted earnings before interest, tax, depreciation and amortisation (ebitda), the preferred measure by many analysts watching the business, fell 26% to 11.6 billion US dollars (£8.9 billion).

However, Glencore’s marketing business finished the year on a brighter note, Mr Glasenberg said. Its operating profit, 2.4 billion US dollars (£1.8 billion), was in line with 2018.

It came as an “excellent performance from oil and a stronger second half metals’ contribution, helping to offset the cobalt headwinds experienced in the first half”.

Alongside its results, the business also said it is ahead of emissions-cutting targets. Its scope one and two emissions, those that the business itself is directly responsible for, will have fallen by 10% by the end of 2020, compared to 2016 levels.

This is ahead of its 5% reduction target. It promised to announce new scope one and two targets in 2020.

Meanwhile, the business projects that absolute scope three emissions will drop by 30% by 2035. Scope three includes the emissions produced when customers use its products and the reduction is largely due to the depletion of its coal mines and oil fields.

“We are also pleased to report progress against our commitments to the transition to a low-carbon economy. We are on track to achieve a near doubling of our first greenhouse gas target,” Mr Glasenberg said.

By Press Association

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